PRE-REFERRAL SETTLEMENT NEGOTIATIONS FOR VIOLATIONS OF CAA, 42 USC SECT 7401 AND OF THE NJ ADMINISTRATIVE CODE. THE NEW JERSEY ADMINISTRATIVE CODE (NJAC) RESTRICTS THE EMISSION OF VOLATILE ORGANIC SUBSTANCES (VOS) FROM ANY SOURCE TO WHICH IT APPLIES TO A MAXIMUM OF 7 LBS/HOUR. STACK EMMISION TESTS CONDUCTED OB NOVEMBER 5 AND 6, 1987 INDICATED THAT CONTINENTAL TICES LANE FACILITY #1 BREAD OVEN OPERATING WITHOUT CONTROL EQUIPMENT, EMITTED ETHANOL (A VOS) AT A RATE AVERAGING APPROXIMATELY 29 LBS/HOUR. THE FACILITY HAS CONTIMUED TO OPERATE AT THE SAME GENERAL PRODUCTION RATE AND WITHOUT ANY FORM OF VOS CONTROL EQUIPMENT SINCE THAT DATE. CONTINENTAL MUST OBTAIN A CONSTRUCTION AND OPERATING PERMIT FOR INCINERATORS AND OTHER CAPITAL IMPROVEMENTS AND INSTALL, TEST AND OPERATE EQUIPMENT TO RESTRICT THE VOS EMISSION RATE IN ORDER TO ACHIEVE COMPLAINCE WITH THE NEW JERSEY SIP. EPA IS SEEKING PENALTIES TOTALLING $454,142. THIS CASE WILL HAVE NATIONAL SIGNIFICANCE BY SETTING A PRE- CEDENT FOR CONTROLLING THE BAKERY SOURCE (OF VOS) BOTH WITH- IN NEW JERSEY AND THROUGHOUT THE UNITED STATES.